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Income Tax Appellate Tribunal, DELHI BENCH “G” NEW DELHI
Before: SHRI G.S. PANNU, HON’BLE & SHRI CHALLA NAGENDRA PRASAD
आदेश /O R D E R PER C.N. PRASAD, J.M.
This appeal is filed by the assessee against the order of the Ld.
Commissioner of Income Tax (Appeals), Moradabad dated 29.03.2016 for the AY 2009-10. The assessee has raised the following grounds:
1. “BECAUSE, or. the facts and in the circumstances of the case, the impugned order passed by the Ld. CIT (A), confirming the order of ITO (TDS) u/s 206C (6A) of the Income Tax Act is unsustainable and bad in law since the instant assessee is not a “person” for the purpose of section 206C(6C) of the Income Tax Act and hence the instant proceedings are patently illegal and bad in law.
2. BECAUSE, on the facts and in the impugned order passed by the Ld. CIT (A), confirming the order of ITO (TDS) u/s 206C
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(6A) of the Income Tax Act is unsustainable and bad in law since the assessment order is itself barred by limitation.
3. BECAUSE, on the facts and in the circumstances of the case, the impugned order passed by the Ld. CIT (A), sustaining the order of ITO (TDS) u/s 206C (6A) of the Income Tax Act is unsustainable and bad in law since the authorities have not considered the proviso contained under sub section (6A) of Section 206C of the Income Tax Act and have misapplied the provisions of the Act.
4. BECAUSE, on the facts and in the circumstances of the case, the Ld. CIT(A) has further erred in holding the TCS is applicable on “sand excavation” and brick kilns” since the same are outside of the preview of Mines and Minerals act and otherwise also TCS is not applicable on the same.
5. BECAUSE, on the facts and in the circumstances of the case, the Ld, CIT(A in refusing to condone the delay since the same got occasioned on account of bonafide reasons beyond the control of the assessee and that there is no malafide in not preferring the appeal within time.
6. BECAUSE, on the facts and in the circumstances of the case, the impugned order passed by the Ld. CIT (A), sustaining the order of ITO (TDS) u/s 206C (6A) of the Income Tax Act is unsustainable and bad in law since it is voilative of the principles of natural justice as no Notice have been served by the Assessing Officer before passing the impugned order.
7. BECAUSE, on the facts and in the circumstances of the case, the impugned order passed by the Ld. CIT (A), sustaining the order of ITO (TDS) u/s 2060 (6A) of the Income Tax Act is unsustainable and bad in law since the demand raised upon the assessee is based on wrong calculation made by the Assessing Authority and the same is unsustainable in law.
8. BECAUSE, on the facts and in the circumstances of the case, the Ld.CIT(A) is not justified in refusing to adjudicate Upon the grounds of appeal raised by the assessee concerning the instant controversy citing the reason that provisions of Rule 46A were attracted and the same were not satisfied. The provisions of Rule' 46A are extraneous to the instant controversy and the Ld. CIT (A) has grossly erred in invoking the said provision.
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9. BECAUSE, on the facts and in the circumstances of the case, the impugned order passed by Ld. CIT(A) is unsustainable being non speaking and highly cryptic.
BECAUSE, on the facts and in the circumstances of the case, the CIT (A) has passed the order without providing the assessee with a due and proper opportunity of hearing and therefore the impugned order deserves to be set-aside being bad in law.” 2. However, at the time of hearing, the Ld. Counsel pressed only ground no. 2, which challenged the assessment order as barred by limitation.
In view of the above submissions, all other grounds are dismissed as not pressed except ground no. 2, which is on limitation of the order u/s 206C(1C)/206C(6A) of the Act passed by the ITO(TDS).
The Ld. Counsel for the assessee submits that in the case of the assessee order u/s 206C(1C)/206C(6A) of the Act was passed on 29.03.2016 for the AY 2009-10 treating the assessee in default for non collection of taxes at source (TCS) on receipt of payments made by lessees, licensees or the right holders in form of royalties and related compensatory and other amounts. The Ld. Counsel for the assessee submits that the impugned order was passed by the Assessing Officer on 29.03.2016 is barred by limitation as it was passed beyond the reasonable period of time. Ld. Counsel submits that though the provision contained in Section 206C of the Act does not specifically prescribed any time limit for initiation of proceedings for passing order u/s 206C of the Act, a I.T.A.No.7985/Del/2019 reasonable period of four years from the end of the assessment year should be the basis and since the order was passed beyond the period of four years, the same is barred by limitation. Ld. Counsel placed reliance on the orders of the Jaipur Bench in the case of Eid Mohammad Nizamuddin vs. ITO(TDS) in dated 29.08.2018 and the Lucknow Bench order of the Tribunal in the case of The District Magistrate District Mining Officer vs. ITO(TDS) in ITA Nos. 243 to 246/Lkw/2019 dated 16.12.2020. Referring to these orders the Ld. Counsel for the assessee submits that the Tribunal held that for passing order u/s 206C(6)/206C(7) the reasonable period of limitation is four years from the end of the relevant assessment year.
On the other hand, the Ld. DR submits that there is no limitation prescribed in the provisions of Section 206C of the Act for passing the order. The Ld. DR referring to the provisions of Section 201(1) of the Act submits that a period of seven years was prescribed as limitation for passing the order, which may be applied to the provisions of Section 206C also.
Heard rival submissions, perused the orders of the authorities below. The question as to whether in the absence of any specific time period specified in the Act can an order be passed u/s 206 of the Act at any time or there should be a reasonable limitation of time has been considered by various High Courts and the Jaipur Bench of the Tribunal in I.T.A.No.7985/Del/2019 the case of Eid Mohammad Nizamuddin vs. ITO(TDS-III) in dated 29.08.2018 considered identical issue and after examining various decisions of the High Court on the issue held as under:
“Thus, a consistent view has been taken by the various Hon'ble High Courts on this issue that when no limitation is provided in the statute then a period of four years is considered as reasonable for passing the order U/s 201(1)/201(1A) of the Act. The provisions of Section 206C of the Act are analogous and a measure for compliance of collection of tax at source as a similar measure for compliance of deduction of tax at source is provided U/s 201 of the Act. The department has accepted those decisions and consequently brought amendment to the provisions of Section 201 and thereby provided the limitation for passing the orders U/s 201(1)/201(1A) of the Act which was inline with the view taken by the Hon'ble High Courts on this issue. Though, subsequently an amendment vide Finance Act, 2014 was again brought in the said provisions of Section 201 enlarging the period of limitation, however, the said amendment is not retrospective. Accordingly, the liability of tax collected at source is also a vicarious liability of the assessee to assist the department in the measure to avoid any possibility of tax avoidance by the persons with whom the specific transactions have been entered into by the assessee. Therefore, in our considered opinion, the analogy and reasoning given in the decisions of various Hon'ble High Courts cited supra in respect of the limitation for passing the order U/s 201 of the Act, is also applicable for considering the reasonable time period for passing the order U/s 206C of the Act. The provisions of Section 201 and 206C of the Act are having same scheme and object being the measures against the avoidance of tax by the parties with whom the assessee had the transactions. Hence, applying the reasonable period of limitation as four years within which the Assessing Officer could pass the order U/s 206C(6)/206C(7) of the Act, we hold that the impugned order passed by the Assessing Officer on 30/3/2016 is beyond the said reasonable period of limitation and consequently is invalid being barred by limitation. Accordingly, we quash the impugned order passed U/s 206C(6)/206C(7) of the Act.”
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Similar view has been taken by the Lucknow Bench of ITAT in the case of The District Magistrate District Mining Officer vs. ITO(TDS) in to 246/Lkw/2019 dated 16.12.2020 following the decision of the Jaipur Bench of the Tribunal. In the case on hand admittedly the order u/s 206C(1C)/206C(6A) assessment year 2009-10 was passed on 29.03.2016 which is admittedly beyond the period of four years from the end of the assessment year 2009-10. Applying the ratio of the above decision of the Jaipur Bench and Lucknow Bench, we hold that the order passed by the ITO(TDS), Moradabad u/s 206C(1C)/206C(6A) dated 29.03.2016 is barred by limitation and the same is quashed.
Ground no. 2 of grounds of appeal is allowed.
In the result, appeal of the assessee is partly allowed.
Order pronounced in the open court on 24/03/2023